Musk admits Tesla Hertz contract not a done deal

Tesla shares slumped more than four per cent in early trading after the US car-maker's boss, Elon Musk, confirmed the company had not yet signed a contract with Hertz to supply 100,000 Model 3 electric cars.

More than a week after the deal for its biggest-ever order was announced, which in turn had sent Tesla's value to an astonishing $US1 trillion ($A1.35t), Musk tweeted: "If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet.

"Hertz deal has zero effect on our economics."

Despite the shock announcement that the deal was not sealed, Hertz muddied the waters further by contradicting Musk, issuing a statement that deliveries of the first batch of Tesla EVs had already begun.

"We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles," the company said.

News of the deal, worth an estimated $US4.4 billion ($A5.9b) to the US brand, saw Tesla's share price leap in value by an incredible 12.7 per cent.

In the process, the car-maker became one of only five companies trading globally worth more than a trillion dollars, alongside the likes of Apple, Microsoft and Google parent company Alphabet.

As investors rushed to plough fresh cash into the car-maker, Musk's 23 per cent stake was briefly estimated to be worth an incredible $US230 billion ($A306b).

The supply deal with Hertz is meant to see Tesla deliver 100,000 Model 3s over the next 14 months.

Despite accounting for less than one per cent of all cars sold annually worldwide, Tesla is now worth as much as the nine largest car-makers combined, including the Volkswagen Group and Toyota.

On the same day Musk admitted the Hertz deal hadn't been finalised, the National Highway Traffic Safety Administration (NHTSA) confirmed 12,000 vehicles in the US would be recalled over a communication glitch that could cause the forward collision warning to accidentally trigger the autonomous emergency braking system.

The recall affects 11,704 Model S, X, 3 and Y vehicles made from 2017, and was triggered after drivers were allowed early access to the 10.3 Full Self-Driving (FSD) Beta software.

Tesla said it was not aware of any crashes or injuries related to the issue.

Instead of a physical recall, the car-maker will ensure all vehicles affected will be updated to later versions of the software.

It's believed NHTSA will supervise the recall in addition to another investigation into Tesla's semi-autonomous Autopilot systems that has seen crashes involving Teslas with static emergency vehicles on roads in the US.

This latter probe is understood to impact up to 765,000 vehicles.